Democratic Leaders Seek More Tax Revenue

Congress reached a compromise on the “fiscal cliff” in early January under which the Bush income tax cuts were renewed for all except high-income taxpayers. However, increased payroll and Medicare taxes took effect on January 1. Moreover, President Obama and other Democratic leaders made clear that the tax hikes in the compromise would not stop them from pursuing others. The President suggested that any spending cuts in the next four years would require Republicans to agree to tax hikes. Nancy Pelosi has mentioned rolling back tax incentives in the capital-intensive oil industry. Similarly, Richard Durbin, the Democratic Senator from Illinois advocates higher taxes on the energy industry. Sandy Levin, a Democratic congressman from Michigan, told fellow Democrats on the House floor that future budgets would raise more tax revenue. And other Democratic officials such as Howard Dean have remarked on the need for higher taxes not just on the wealthy, but the entire American public. Democrats who wish for higher taxes in the future may very well look to impose entirely new taxes on Americans, such as a carbon tax or a value-added tax (VAT).